Stocks End Higher, But Log Worst Weekly Drop in 2013; IBM Skids 8%

Stocks reversed a two-day slump to close out the week on a positive note, with the S&P 500 rebounding after finishing below it 50-day moving average for the first time this year, but all three major averages still logged their worst weekly drop this year.

The Dow Jones Industrial Average eked out a gain of 10.37 points to close at 14,547.51, after falling nearly 100 points at the open, boosted by Microsoft. IBM and GE led the laggards. IBM's sharp decline single-handedly put more than 100 points of downward pressure on the blue-chip index.

The S&P 500 gained 13.64 points to end at 1,555.25. And the Nasdaq bounced 39.70 points to finish at 3,206.06. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, dropped below 15.

For the week, all three major averages dropped more than 2 percent each. IBM was the biggest decliner, while Coca-Cola advanced.

Among the key S&P sectors, energy was the worst performer for the week, while telecoms gained.

Boston Bombers' Economic Ripple Effect

CNBC's Jackie DeAngelis looks at the Boston lockdown, following last night's shootout. The city and surrounding areas are basically closed. What does that do to the local economy, with Michael Barrett, former director of strategy for the White House Homeland Security Council.

"Volume's been light—there's no real economic news, nothing out of Washington, Fed's quiet and no more real earnings until Monday," said Alan Valdes, director of floor operations at DME Securities. "Most people are watching what's happening in Boston, although it's not really moving the markets."

The two suspects in the Boston Marathon bombing killed an MIT police officer and hurled explosives at police in a car chase and gun battle overnight that left one of them dead and his brother on the loose. Thousands of officers swarmed the streets in a manhunt that all but paralyzed the Boston area. Residents in the Boston area have been told to stay inside while police search for the suspect.

With no major economic news on tap Friday, the focus remained largely on corporate earnings.

McDonald's edged lower after the fast-food chain missed earnings expectations by a penny and said global comparable sales were down 1 percent for the quarter, with China and Japan weakness helping drive sales in the Asia/Pacific, Middle East, and Africa (APMEA) region down 3.3 percent.

IBM tumbled sharply after the computer hardware and software company posted quarterly results that fell short of consensus estimates and issued a full-year earnings forecast below estimates. In addition, the tech firm said it will accelerate the pace of job cuts after sales of software and mainframe computers slowed.

Also among techs, Microsoft gained after the software giant topped earnings expectations. Separately, the company announced that CFO Peter Klein will leave in June. And Google easily beat earnings estimates, while revenue fell slightly short of forecasts.

Chipotle Mexican Grill surged to lead the S&P 500 gainers after the fast-casual restaurant chain posted a jump in quarterly earnings.

CNBC's Bob Pisani and Art Cashin, of UBS, discuss the market holding it together, and say it would be a 100 points higher, were it not for IBM. Boston is a distraction, says Cashin, the important thing is whether this is part of a network. The focus next week, he adds, will likely turn to Europe.

"Earnings, I would argue are coming in better than expected. Underneath the surface is something that's not quite so healthy.They're struggling on the top line, the revenue side. That is indicative of a global economy growing below trend," said Bill Stone, chief investment strategist at PNC Wealth Management.

SeaWorld rallied in its market debut on the New York Stock Exchange after the company priced its IPO at $27 per share on Thursday, at the high end of its expected range. (Read More: SeaWorld IPO Hopes to Make a Splash)

Apple slumped to close near $390 a share, breaking below $400 for the first time since December 2011 earlier this week. Apple tumbled 9 percent this week alone and has erased more than 40 percent since hitting its all-time high of $705 a share in September, The iPhone maker also lost its title of the world's most valuable company by market cap to oil giant ExxonMobil on Wednesday.

Vertex Pharmaceuticals skyrocketed after the drugmaker reported a successful trial for its experimental cystic fibrosis drug.

Meanwhile, GlaxoSmithKlinetraded lower after the pharmaceutical giant was accused of market abuse by the U.K.'s Office of Fair Trading on Friday. The regulator alleged that Glaxo paid generic firms to delay launching cheap copies of its top-selling anti-depressant Seroxat.